HB1337 (2022) Detail

Relative to the duration of unemployment benefits.

HB 1337 - AS AMENDED BY THE HOUSE

 

17Mar2022... 0732h

2022 SESSION

22-2295

04/08

 

HOUSE BILL 1337

 

AN ACT relative to the duration of unemployment benefits.

 

SPONSORS: Rep. Turcotte, Straf. 4; Rep. Doucette, Rock. 8; Rep. Notter, Hills. 21; Rep. Renzullo, Hills. 37

 

COMMITTEE: Labor, Industrial and Rehabilitative Services

 

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ANALYSIS

 

This bill specifies the duration of unemployment benefits based on the state's average unemployment rate.

 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

17Mar2022... 0732h 22-2295

04/08

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty Two

 

AN ACT relative to the duration of unemployment benefits.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  New Paragraph; Unemployment Compensation; Weekly Benefit Amount.  Amend RSA 282-A:25 by inserting after paragraph III the following new paragraph:

IV.(a)  Notwithstanding RSA 4:45 and the maximum benefit amounts in paragraph I, for unemployment compensation claims submitted during a calendar year, the duration of benefits under this chapter shall be limited to 16 weeks, if the state’s average unemployment rate is at or below 3 percent, plus one additional week for each 0.5 percent increment in the state’s average unemployment rate above 3 percent, up to a maximum of 26 weeks if the state’s average unemployment rate exceeds 8 percent.

(b)  In this paragraph, "state average unemployment rate” shall mean the average of the 3 months for the most recent fourth calendar year quarter of the seasonally adjusted total unemployment rates as determined and benchmarked by the department of labor.

2  Effective Date.  This act shall take effect 120 days after its passage.

 

LBA

22-2295

Amended 4/8/22

 

HB 1337- FISCAL NOTE

AS AMENDED BY THE HOUSE (AMENDMENT  #2022-0732h)

 

AN ACT relative to the duration of unemployment benefits.

 

FISCAL IMPACT:      [ X ] State              [ X ] County               [ X ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2022

FY 2023

FY 2024

FY 2025

   Appropriation

$0

$0

$0

$0

   Revenue

$0

$0

$0

$0

   Expenditures

$0

Indeterminable

Indeterminable

Indeterminable

Funding Source:

  [ X ] General            [    ] Education            [ X ] Highway           [ X ] Other - Various Government Funds

 

 

 

 

 

COUNTY:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

$0

Indeterminable

Indeterminable

Indeterminable

 

 

 

 

 

LOCAL:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

$0

Indeterminable

Indeterminable

Indeterminable

 

METHODOLOGY:

The Department of Employment Security offers the following information concerning the fiscal impact of this bill:

 

  • State Unemployment Compensation (UC) benefits are paid from the Unemployment Compensation Trust Fund (“Trust Fund”).  A new provision at RSA 282-A:25 which could shorten the number of State UC benefit weeks would potentially have an impact on the Trust Fund.  However, forecasting the economic impact to the Trust Fund would be speculative.  
  • Under current law, RSA 282-A:25, each Claimant receives a specific maximum benefit amount based on their annual earnings.  The benefit duration period is determined by dividing the maximum benefit amount payable by the individual’s weekly benefit amount.  In New Hampshire, the maximum number of weeks available is currently 26 weeks and has been since 1951.  Additionally, the maximum benefit amount may be used for weeks of total or partial unemployment.  
  • Department statistics show the average duration of benefits claimed in NH has historically been less than 13 weeks despite 26 weeks being available.  Currently, the average duration is less than 15 weeks despite the experience of the pandemic when over 175,000 citizens utilized and depended upon the unemployment program.  In addition to New Hampshire’s low average duration, the state also has fewer people exhaust all of the benefits that are available with less than 16% of claim filers exhausting benefits prior to the pandemic.  
  • The maximum weekly benefit amount in NH is $427, and because that amount equates to only a 31% wage replacement rate for the person earning the average private sector weekly wage, it tends to act as a control for the length of time someone claims benefits.
  • As a result of the historically low benefit duration, low claim exhaustion and low weekly benefit amount, New Hampshire also has one of the lowest Unemployment Insurance tax burdens in the country.  Prior to the pandemic, New Hampshire had the 2nd lowest average tax burden in the country with 0.14% of total wages paid.  Florida had the lowest at 0.12%.
  • Prior to the pandemic during 2018 and 2019, nearly 50% of claimants filed for less than 10 weeks of unemployment benefits.  However, New Hampshire had over 7,600 individuals during this two-year time period file benefits for more than 16 weeks.  This bill would set the number of weeks available at 16 weeks.  Of those 7,600 individuals that filed for more than 16 weeks, over 2,000 of them reported working part-time employment thus had a reduced weekly benefit amount.  New Hampshire allows an individual to have part-time employment while collecting benefits thus promoting a faster attachment to the labor market which often translates to part-time employment in the hospitality and retail sectors.  The wages earned from part-time employment reduce the individual’s weekly benefit amount when the earnings exceed 30% of that benefit amount.  However, because the weekly benefit amount is reduced by these part-time earnings, this can cause a higher number of weeks, albeit at a lower weekly benefit amount, being paid from the trust fund.  Based on current law, an individual can collect partial benefits if otherwise eligible until they’ve reached their maximum benefit amount.  Thus, part-time workers collecting partial benefits could collect for longer than 26 weeks.  It is not possible to predict the behavior of individuals should this bill  become law but, if we assume individuals behave reasonably, then an individual would have less  incentive to seek part-time employment while filing for benefits due to the proposed cap of 16 weeks.  There would be no incentive for someone to reduce their weekly benefit amount with part-time earnings when the benefit is limited to 16 weeks.  This would  result in less part-time employment amongst people filing for unemployment benefits and more people simply exhausting their 16 weeks of full benefits.  
  • Attempting to calculate any impact to the Trust fund based on limiting part-time earners from filing for partial benefits to 16 weeks during periods of low unemployment would require hypothetical analyses including whether there would be an effect on an individual’s decision to pursue part-time employment while filing for benefits.  Thus, any attempt to predict the impact on the trust fund would be entirely speculative.

 

The Department has indicated the impact on state, county and local expenditures are “indeterminable”.  The proposed limit on the duration of State UC benefits and linkage to unemployment rates may result in increased costs to governmental entities through an increase in the need for welfare, SNAP benefits, and Medicaid.  It is unknown how this would affect the tax rates of governmental entities as employers and the reimbursement charges to the state, county, and local governments.

 

It is assumed that any fiscal impact would occur after FY 2022.

 

AGENCIES CONTACTED:

Department of Employment Security

 

Links


Action Dates

Date Body Type
Feb. 3, 2022 House Hearing
March 9, 2022 House Exec Session
March 9, 2022 House Exec Session
House Floor Vote
April 6, 2022 Senate Hearing
April 14, 2022 Senate Floor Vote

Bill Text Revisions

HB1337 Revision: 35346 Date: April 11, 2022, 9:12 a.m.
HB1337 Revision: 35197 Date: March 10, 2022, 8:06 a.m.
HB1337 Revision: 33884 Date: Nov. 20, 2021, 11:15 a.m.

Docket

April 14, 2022: Inexpedient to Legislate, MA, VV === BILL KILLED ===; 04/14/2022; SJ 8

April 6, 2022: Committee Report: Inexpedient to Legislate; Vote 5-0; CC; 04/14/2022; SC 15

March 31, 2022: Hearing: 04/06/2022, Room 103, SH, 10:00 am; SC 14

March 22, 2022: Introduced 03/17/2022 and Referred to Executive Departments and Administration; SJ 6

March 17, 2022: Ought to Pass with Amendment 2022-0732h: MA RC 179-153 03/17/2022 HJ 8

March 17, 2022: Amendment # 2022-0732h: AA VV 03/17/2022 HJ 8

March 10, 2022: Minority Committee Report: Inexpedient to Legislate

March 10, 2022: Majority Committee Report: Ought to Pass with Amendment # 2022-0732h (Vote 11-10; RC)

Feb. 28, 2022: Executive Session: 03/09/2022 10:00 AM LOB 305-307

March 9, 2022: Executive Session: 03/09/2022 10:00 a.m. LOB305-307

Feb. 3, 2022: Public Hearing: 02/03/2022 1:00 p.m. LOB305-307

Nov. 20, 2021: Introduced 01/05/2022 and referred to Labor, Industrial and Rehabilitative Services